Xbox |OT|

[Ryuu96]

I was just skimming through the final report, and there is a lot to unpack here.

A few examples:

The remedies offered to the CMA were different to the the ones offered to the EC (page 351)

Microsoft told us that the revised details of the Microsoft Cloud Remedy set out in its response to the Remedies Working Paper were consistent with the revised remedy proposal which had been put forward to the European Commission, but that Microsoft's proposal to the CMA went beyond the proposed commitments to the European Commission in certain respects in order to address the CMA's specific concerns set out in the Remedies Working Paper.

No one can predict the evolution of the cloud gaming market: the CMA, MS, ABK or third parties 🤔 (page 368)

Cloud gaming is an early-stage and growing dynamic market, and there is considerable uncertainty as to how it will develop and what competing business models will emerge. We believe, for the reasons set out in detail in Chapter 8, that foreclosure of Microsoft's rivals in cloud gaming services may be expected to result in substantial harm to competition in this market. We recognise that we cannot predict with any certainty how exactly the market might evolve absent the Merger (or if the Merger is allowed to proceed on the basis of the Microsoft Cloud Remedy). Neither, in our view, can the Parties or third parties. We consider this represents an inherent specification risk in the Microsoft Cloud Remedy – even if the remedy could be well-specified to cover the current status of the market, it may not be suited to future changes. This means that we cannot have a high degree of confidence that the terms of the remedy would be sufficiently well-specified to address these unpredictable market changes.

COD could make Nintendo (Switch) a closer competitor to Xbox (page 389)

We have concluded in Chapter 7 that Microsoft would not have the incentive to foreclose rival console gaming services in the UK. However, this is not determinative of whether Microsoft has a commercial incentive to develop and publish native CoD titles for Nintendo. This would involve substantial costs that would need to be recouped through additional sales of native versions of CoD on Nintendo. In addition, placing valuable CoD content on Nintendo would in principle increase diversion away from Xbox and towards Nintendo. While this effect may be relatively limited given our findings in Chapter 7 that Nintendo competes less closely with Xbox, making CoD on Nintendo could make it a closer competitor to Xbox, which we consider would not be in Microsoft's interest. The Parties have not provided us with convincing evidence of the expected costs, revenues and profitability that might inform an assessment of Microsoft's commercial incentives in this respect.

Predicting the evolution of COD and customer behaviour in ten years is hard (page 391)

The agreement has a ten-year term. We consider that account must be made for the inherent uncertainty over the scale of the benefits over time. The likelihood of the assumptions remaining constant will decrease over time, and the changing nature of the console market makes it harder to make any predictions about how a particular retail product (for example, CoD [REDACTED]) might evolve, or how customer behaviour might develop. As such, it is not a reasonable assumption that any annual benefit would remain constant over the term of the agreement. Instead, in our view the benefits are likely to decline significantly (and certainly at a rate greater than the 'risk-free' rate used in Microsoft's NPV calculation) over time, reducing our confidence that they can be expected to be realised.

MS has tried to buy at least one mobile games publisher (page 394)

We note Microsoft's submission that Activision has significant strength in mobile gaming, and consider that the presence of Activision's games on any mobile gaming store would enhance its competitiveness. However, we also consider that this could be achieved by less anti-competitive means than the Merger, and Microsoft could acquire 'attractive content and experience with player engagement and acquisition' by buying a different mobile games publisher. This appears to have been Microsoft's strategy – it attempted to buy [REDACTED] in [REDACTED], and said [REDACTED].

A lot more coming this weekend!

Source: Idas